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Technological Imitation and Innovation in New European Union Markets

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  • Ainura Uzagalieva
  • Evžen Kocenda
  • Antonio Menezes

Abstract

We analyze the role of imitation and innovation in promoting technological progress in new members of European Union: the Czech Republic, Hungary, Poland and Slovakia. The two modes of technological development—innovation and imitation—are distinguished from one another by identifying the dominant orientation of innovation efforts at the industry level. Specific industry features and the origin, structure and size of foreign direct investments in these countries are utilized for this purpose. The empirical relationship between intra-industrial bilateral trade flows, which proxy the level of technological progress, and innovation expenditures is analyzed using a gravity model. During the estimation stage, we use appropriate instruments to account for the potential endogeneity of innovation to trade. The results reveal the important role of foreign direct investment and multinationals in the technological progress of the region. Specifically, technological progress that is due to innovation is driven mainly by affiliates of foreign firms and multinationals.

Suggested Citation

  • Ainura Uzagalieva & Evžen Kocenda & Antonio Menezes, 2010. "Technological Imitation and Innovation in New European Union Markets," CESifo Working Paper Series 3039, CESifo.
  • Handle: RePEc:ces:ceswps:_3039
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    Cited by:

    1. Hanousek, Jan & Kocenda, Evzen & Maurel, Mathilde, 2011. "Direct and indirect effects of FDI in emerging European markets: A survey and meta-analysis," Economic Systems, Elsevier, vol. 35(3), pages 301-322, September.
    2. Jan Hanousek & Evzen Kocenda & Pavla Vozárová, 2020. "Impact of Multinational Enterprises on Competition, Productivity and Trade Spillovers across European Firms," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 70(2), pages 172-212, August.
    3. Jan Hanousek & Evžen Kočenda, 2015. "Determinanty evropského zahraničního obchodu: instituce, kultura, infrastruktura a geografie [Determinants of the European Trade: Institutions, Culture, Infrastructure and Geography]," Politická ekonomie, Prague University of Economics and Business, vol. 2015(5), pages 624-640.
    4. Jan Hanousek & Evžen Kočenda & Anastasiya Shamshur, 2014. "Efektivita evropských firem [Efficiency of European Firms]," Politická ekonomie, Prague University of Economics and Business, vol. 2014(3), pages 303-322.
    5. Oxana Babecká Kucharčuková & Jan Babecký & Martin Raiser, 2012. "Gravity Approach for Modelling International Trade in South-Eastern Europe and the Commonwealth of Independent States: The Role of Geography, Policy and Institutions," Open Economies Review, Springer, vol. 23(2), pages 277-301, April.

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    More about this item

    Keywords

    foreign direct investment; innovation; imitation; international trade; European Union;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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